Charles Schwab: AI, Virtual Reality on Tech Team's Radar

June 13, 2018 — 9:30 AM EDT

The use of technology in the financial services market is rapidly expanding, but when it comes to offering new advances, Charles Schwab keeps the customer in mind. After all, having the latest in technology can lure clients to a brokerage, but if it doesn't improve their interactions, it will ultimately be a waste of time and money.

As a result, The Charles Schwab Corporation (SCHW) is focused on innovations that meet clients' needs and make their interactions with the company easier. "It's everything from thinking big about how to change the way people invest and get advice to what we sometimes call 'modernizing the mundane' – things like making it easier for clients to authenticate themselves online or open accounts with us," said Cynthia Loh, vice president of digital advice and innovation at the San Francisco-based brokerage, in a email interview with Investopedia. "The consistent theme across everything we try to do with technology is really about improving the client experience."

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Rewind a decade, and most online brokerages were competing against each other to roll out the most robust trading platform. These days, the brokerages have to compete with other experiences consumers are having online – whether it's shopping on, Inc.'s (AMZN) platform or chatting on Messenger. Consumers have gotten used to the convenience and ease of placing orders online, and they expect the same of their brokerages.

"Amazon knows that I need more paper towels even before I do, which is incredible. How can we take that predictive and proactive approach and apply it to investing and what we know investors need at different times of the year or during common life events," said Loh. The way Loh sees it, technology eliminates a lot of the trade-offs that have plagued the brokerage industry for years. Investors seeking service and wealth management had to have a lot of money, while cost-conscious investors could get cheaper trades and low fees, but that's about it. Technology can reduce some of that friction, said Loh.

So where is Schwab focused when it comes to technology? Loh said that digital investing and advice will be a big focus area largely because it levels the playing field, giving more people access to investing and financial advice without the complexity and cost. She noted that Schwab has more than $30 billion invested in its digital advice service but thinks there's more room for growth in that area.

However, the discount brokerage isn't stopping there. Loh said there is a range of technology that can help people invest and manage their wealth, including predictive software that will provide Schwab with more data on what customers want or need at different stages, artificial intelligence to push automation and virtual reality to make investing more engaging. "It's exciting to think about what's possible," said the executive, pointing to Schwab's recently created Digital Accelerator teams in San Francisco and Austin. Their focus is to "quickly develop and launch new technologies for clients – everything from incremental client experience improvements to bigger product and service launches, so this is a big priority for Schwab."